Uncertainty over pending interest rate rises, difficulties in raising finance and an oversupply of housing stock are thought to be behind a continued decline in Dunedin property values.
Quotable Value (QV) residential property indices for July released yesterday showed values had dropped by 1.1% since March this year, after increasing by 4.7% in the eight months to March.
"Local real estate agents are also reporting a decrease in the activity of interested parties during recently-held open homes within Dunedin city," QV valuer Tim Gibson said yesterday.
"This is typically for the lower to mid-value bracket properties.
"A current oversupply of stock prevails in Dunedin, due to the low volume of active and potential purchasers," he said. A drop in interest shown by first-home buyers could be attributed to a wait-and-see approach, as well as some difficulty in raising the required finance to purchase.
"Some potential purchasers have no doubt been put off by pending interest-rate increases," Mr Gibson said.
Dunedin values were 3.7% above last year; down from the 5.8% reported last month, while Queenstown Lakes (-0.2%) had similar values to the same time last year.
The average sales price for Dunedin in July was $273,719 and $589,266 for the Queenstown-Lakes district.
New Zealand property values also continued to decline during July, with values now 3.7% above the same time last year, but 3.9% below the market peak of 2008.
The price index showed values had dropped 0.8% since March, after rising 4.9% in the previous eight months.
Values were 4.1% above the same time last year and 4.7% below the market peak of late 2007.
While values declined, the national average sales price increased slightly, from $404,715 to $407,191.
"An increasing number of people appear to be shelving plans to buy houses and instead focusing on reducing debt," QV.co.nz research director Jonno Ingerson said yesterday.
"We are now seeing more of a do-nothing sentiment.
"The lack of buyer demand, combined with an increasing supply of unsold houses is causing values to gradually drop."
A Terralink International report on May mortgagee sales released yesterday showed 264 registered mortgagee sales, up from 246 in April and up 7% from May last year (247).
The residential price index is calculated using sales data from the three months leading up to the month being reported.
It differs from the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets.
